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Way to go "Team Casey Pond” –
Not unlike a lot of my “boomer” peers as my folks aged – I saw the struggles my dad had multiply taking care of my mom as her dementia progressed. This program would have been a great option for them. Having a safe place to take mom once or twice a week during the day would have made a big difference in both of their lives.
A quote attributed to Betty Davis, "Growing old is not for sissies!” is very true.
Bill - Thanks for your voice of support.
Recently a friend shared with me an ancient Chinese Proverb that simply states that the beginning of wisdom is learning to call things what they are. Last night the taxpayers of Steamboat Springs were asked to help fund a “private business venture”.
The WIIFM (“What’s in it for me?”) for the City was the hope of increased sales tax collections. I ran the numbers the Chamber provided and without question there could be a sizable return on the City’s “investment” if everything goes as planned. However, from my perspective it is not the City’s job to chase after (fund) the next “great thing” in the hopes of increasing sales tax dollars.
The City’s job is not to chase sales tax dollars. The City’s job is to be as responsible as possible with the sales tax dollars received to be sure essential services are provided, we take care of what the public owns and support a “quality of life” infrastructure ranging from trails to soccer fields, ice rinks and rodeo grounds, etc.
The hiring of a Conference Sales Consultant to coordinate between the major lodging properties is in all likelihood a good business idea. The City does play a role in “conference” business. It is the same role that it is charged with in helping making this place a great place to live, work and play. It is a long list of important things to make sure happen:
When the faucet is turned on safe drinking water comes out and when the toilet is flushed waste is properly disposed of.
When someone in need calls “911” help is on the way in a reasonable amount of time.
The streets are maintained, plowed, and safe to travel.
The publicly owned facilities are maintained.
The trash is picked up and landscape is watered.
Etc – etc.
Last night the taxpayers of Steamboat Springs were asked to co-fund a business venture. Is this what the taxpayers want the City to do? I would welcome other’s comments on this subject.
Hi Scott W –
In conjunction with the “Shop Local” campaign Tracey Barnett made the statement to the Pilot that a dollar spent locally turns over 3 to 4 times (multiplier). When I met with Tracey and challenged this figure – she cited that that is what she had read in some national Main Street publication. A multiplier of 3 or 4 times is total BALOONEY!
Depending on the industry sector a case could be made that a dollar spent locally, optimistically might have a multiplier of 0.5 to 0.8.
Let say $100 is spent on a winter coat. Let’s say that dollar was spent with a retailer owned locally vs. chain and that business was organized as a sole proprietor.
On average nationally the labor cost for this business is going to be about 20% of sales.
Now in this example $20 would be paid in gross wages/salary. Less taxes at about 17% would leave about $16.50 of disposable income. Based on BLS consumer expenditure data and the Routt County Consumer Preference Study (leakage) optimistically about 40% of this would be spend locally. So the very first turn of this dollar would result in $6.60. So out of $100 only $6.60 would be re-spent locally by the employees.
Now the business itself will have overhead including such items advertising, insurance, rent, utilities, etc. This is likely in the 25 to 30 pct. range. Not all that much is left over as profit.
For $100 spent locally, less: ($50 for COGS+$20 Labor+$25 overhead) $5.00 profit before taxes. How much of overhead is spent locally? It all depends – but let’s for discussion 50% of it is. In addition, let’s assume that the owner’s $5 profit mirrors that of the employees spending. So, optimistically here is how much of $100 spent in a retail establishment based on these assumptions would be multiplied.
First Turn in this retail establishment = $20.66 ($6.60+$12.50+$1.660) or 0.2066
Second Turn (assuming the $20.66 was spent in exactly the same way the result would be $20.66 x .2066 = $4.26. Assuming that the third turn was spent exactly the same way would be $4.26 x .2066 = $0.88. The fourth turn (we are getting silly now) would result in $0.18.
So $100 spent locally at a locally owned retailer results in about $26 of local res-spending. Or, a multiplier of .26 (not 3.0 or 4.0)!
If this spending were to occur at an auto repair shop or a health care provider the multiplier increases because of higher wages.
Obviously there are a host of variables to account for ranging from the industry sector, ownership, overhead, etc. Simply put, every situation is different depending on the circumstances.
To do things simply because they generate City sales tax dollars can be dangerous economic waters to venture into.
Hi Scott -
The analysis done on Sources of City Sales Tax can best be described as “quick-n-dirty” high summary level. As with any analysis of this type – there is always more that can be done. This analysis did not do the impact of the direct/indirect/induced impact attributed to local workforce local spending would have on City sales tax collections.
Last summer I did a 4-part series in the Valley Voice that looked at tourism (very broadly defined) as a source of household income and as a source of employment. Again at a high level tourism locally likely accounts for 20% +/- as a source of household income and 30% +/- of employment.
Fundamentally we live in the house that tourism built. Tourism is an amalgamation of industry sector whose impact encompasses (Accommodations/food services, Arts, Recreation and Entertainment, Real Estate and Retail Trade). For Steamboat Springs and all of the Yampa Valley, tourisms (past/present/future) is very important. However, we are much more than just a tourism economy.
In my discussion regarding the local economy I try and avoid qualitative assessments. Discussions that place a value judgment that one industry sector in the local economy is more important than another is a wee-bit silly. The local economy measured in terms of sources of household income (labor and non-labor) and employment both wage/salary and self-employment are wonderfully interconnected.
BTW - Sent the source files of the analysis to you.
Hi Scott -
I will put the report I did and the MS-Excel workbook used for the analysis into my Public DropBox folder. I will do this when I get back to my office at the house. Anyone else that would like to see this information just use the "Reply" button in the lower left of this posting and give me an email address you would like me to use.
In addition, Scott W. is correct in pointing out that numbers referenced has not been adjusted for inflation. It is relatively easy to make these adjustments. I need to modify the CPI to exclude items such as Health Care, fuel, personal services, etc. so we have a basis of comparison of equal items.
The purpose of the analysis was not report on growth but the allocation of sources of City . sales tax collections. The key take away for me from the analysis is that the "Local Population" is accounting for at least 65% of City sales tax collections annually. Visitor's share (35%) pre-recession were roughly roughly split equally between sales tax collected on retail & food/beverage and lodging. Through the recession - lodging's share of sales tax dollars declined - and yet the visitor's share likely identified with retail and food & beverage remained relatively consistant.
HI Scott -
I am in the process of getting data that at a minimum will help put the “situation” into some perspective. I have asked the City Manager to provide me the number of calls over the past 10 years annually. I have asked for the coding of these calls because a hierarchy of seriousness has to exist.
Than using data reported by SSPD to the Colorado Bureau of Investigation about reported crimes (violent and property).
The end game will of this analysis will be to calculate a per (1,000?) population and an estimated for visitors for both violent and property crimes. This along with the sheer volume of number of calls that are occurring will highlight that the vast majority of calls – although public service in nature have little to do with public safety. If this ratio of total calls to actual reported (violent/property) crimes – we may be overstaffed – or the citizenry is calling on items that are civil in nature.
When I get the data I requested from Joel – I would like the opportunity to discuss with you how to do a honest evaluation of the data as well as strategies to how best start including this data as a part of the public discussion. Want to nerd out on some numbers?
Your love and knowledge of the sport will serve you well in this endeavor.
You will begin to look at snow in a whole new way – it is time released irrigation.
Revitalize implies that at one time downtown was more vital than it is today. How would one assess downtown’s past and present vitality? If City sales tax collections are used, downtown has recovered beyond pre-recession taxable sales levels. For 2013 downtown is on pace to have about $85.5 million in taxable sales. That is better than go-go days prior to the recession when taxable downtown sales peaked in 2008 at $81.9 million.
Are we comfortable with not defining what downtown vitality is and how it is going to be measured routinely and objectively? I’m not! I come from a world where fact really do matter. If the desired outcome of downtown revitalization is a poorly defined set of subjective feelings – that is a wee-bit too goofy for me.
Hi Harry –
Arm pits and opinions - this is a great metaphor. I likely will use this in some of the upcoming discussion City Council will have on this topic and other topics.
This article has been picked up by the Denver Post. What is the next stop for this story, a reference during Jay Leno's opening monologue? Stranger things have happened.
You are right Mark - you can't make this stuff up.
Last login: Wednesday, March 12, 2014
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